The EU has unveiled a set of “revolutionary” laws to curb the power of six big tech companies, including allowing consumers to decide what apps they want on their phone and to delete pre-loaded software such as Google or Apple’s maps apps.
The package of laws will also pave the way for more competition in some of the areas most guarded by the tech firms, including Apple Wallet and Google Pay.
The Digital Markets Act (DMA) is the second big package of EU laws to hit tech firms in two months and defines a series of obligations that gatekeepers need to comply with, including not participating in anti-competitive practices.
The act follows the Digital Services Act, which came into force on 25 August and aims to curb online hate, child sexual abuse and disinformation with the first laws ever governing online content.
The DMA aims to undo the gatekeeper or controlling position that large tech companies have commanded in the last 10 years and gives the European Commission the power to conduct market investigations and design remedies if the firms fall out of line.
“This is revolutionary,” said one commission official. Brussels intends the laws to open the door to more competition, allowing startups to compete with the giants on a level playing field for the first time.
The tech companies – including Apple, Google and Amazon – have six months to comply with a full list of dos and don’ts under the new laws, after which they could be fined up to 10% of their turnover. In Meta’s case, this would be 10% of $120bn (£95bn).
One official said it would liberate the consumer and businesses, particularly startups that have faced technical barriers to get on to a platform to reach users. “For example, now when a consumer sees an app doesn’t do well on their phone, they think immediately it is the app that is not really good. Very often it is not because the challenger app is bad but because the interoperability is missing because it is in the interest of the gatekeeper to make sure the experience is not the same.”
Phones often come preset with weather, maps, calculator and email apps, some of which are difficult to delete. This will no longer be allowed.
Big tech companies will be barred from monetising information about phone users, prohibiting them from using the data they collect from multiple apps on a phone to build up a detailed picture of individual consumer behaviours for advertisers.
Officials also gave examples of the controls around payment systems on Apple and Android phones. While consumers can use alternatives such as bank cards, there may be startups that can offer truly innovative services currently unviable because of alleged “gatekeeping” activity.
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The laws will initially apply to six companies: Alphabet (which owns Google), Amazon, Apple, ByteDance (the owner of TikTok), Meta (Facebook, Instagram and WhatsApp) and Microsoft.
Many of the services they offer have also been designated for regulation. These include WhatsApp, Messenger, TikTok, Facebook, Amazon, Google, Chrome, Safari, Google Maps, Google Pay and Google Shopping.
Earlier this summer, Samsung was notified that it met the criteria to be classified as a gatekeeper, but the multinational successfully argued against this. The criteria include size of turnover and having at least 45 million users in the EU.
The European Commission accepted arguments from Alphabet and Microsoft that their email services Gmail and Outlook did not meet the required criteria.